THE devil is in the detail.

After driving the new 207 GT we wondered why Peugeot had gone to the trouble off offering a turbocharged 110kW/240Nm 1.6-litre GT, when a hotter 128kW/240Nm GTi model will be on our roads by June.

Confused? So were we.

However, we suspect the GT essentially replaces the old 102kW/194Nm 206 GTi, leaving room for the new GTi to replace the 130kW/202Nm 206 GTi 180.

Anyhow, that’s our take on the positioning of Pug’s newest hot hatch.

With that settled we can now concentrate on the 207 GT, which is the range topper until the $33,490 GTi arrives.

The 207 arrives with quite a lot riding on it as it battles not only the light but also small car segment and in GT guise, a raft of performance offerings from other makers.

But Peugeot Automobiles Australia is confident the newest addition to the Lion’s lineup will be a hit, so much so that it may even eclipse the 307 as the marque’s best seller.

Visually the 207 borrows cues from the 307 but has none of the MPV look of its bigger sibling. The overall styling is eye-catching and distinctive without being too way out. The “feline” look of the front end has been well executed, with the eyebrow headlights being a strong design feature.

With an offering of two petrol engines - 1.4-litre and 1.6-litre - as well as for the first time a 1.6-litre HDi turbo-diesel, there’s every chance the 207 will be a hit.

Both 1.6-litre engines are a result of the joint-development work between PSA-Citroen and BMW. The 1.6-litre direct-injection VVT petrol unit is shared with the Mini Cooper and Cooper S.

That’s a good thing because both companies are known for their expertise in engines – BMW for linear, smooth fours and sixes and Peugeot for its turbo-diesels. In the case of the GT engine, it is one of the smoother 1.6 units around. It is also economical and surprisingly tractable around town.

Peugeot says maximum torque of 240Nm is reached at 1400rpm and maintained up to 3500rpm and we believe them. The 1.6-litre is crisp, quiet and linear in its power delivery and will rev right out to the redline with ease.

Helping the small capacity unit on its way is a twin-scroll turbocharger that delivers strong boost from just 1000rpm. Turbo lag is virtually eliminated.

The GT delivers its power via a five-speed manual gearbox, which is not as precise as we would have liked. The bulky centre console also meant there was little room beside the clutch pedal to rest your left leg.

That said, the engine is a gem. The aim of the 1.6-litre turbocharged engine was to deliver comparable power to a conventional 2.0-litre four-cylinder. We’d say both Peugeot – and BMW – have been successful.

The GT 1.6 also delivers pretty decent fuel economy with a city fuel figure of 9.3L/100km, combined cycle of 7.0L/100km and a highway figure of 5.6L/100km.

The 1.6-litre in no way overwhelms the 207’s chassis either. The car could take some serious horsepower, which we suspect will happen when the RC version of the car arrives in Europe.

Apart from the new 1.6 engines, the 207 is bigger, safer with a five-star EuroNCAP crash rating and better equipped than the 206.

Importantly too, quality has improved, with an interior that now looks and feels more like something out of Germany than France. The controls have a sense of solidity and durability about them but there’s a French chic-ness about the overall cabin design, which is a good thing.

In the past we’ve enjoyed the suppleness of the 206’s ride and crisp dynamics so sliding behind the steering wheel of the 207 GT was greeted with expectation and enthusiasm.

First up, the ride is far better than the 307 and 407 – and that’s saying something - but there are still some issues with its low-speed compliance.

Around town the GT is quite firm, which we accept as it’s more of a performance offering than other 207s. It can crash over some bumps but once cruising at highway speeds it settles into a composed, supple gait. When pushed it will hit the bump stops, but it must be said you’re traveling quite hard and fast before this happens.

The GT, with its 17-inch alloys and lower-profile tyres, is biased towards enthusiasts so they’ll appreciate the crisper handling.

We suspect most owners too will be happy with the GT’s day-to-day ride, handling and steering. It’s impressively fluid at 100km/h and brings back memories of the venerable 306 in the way it behaves.

Cornering is near neutral and the electrically assisted steering offers plenty of assistance at low-speeds and becomes meaty at higher speeds. However, it did feel a little leaden. The height and reach adjustable steering is welcome and it is now easier to find a suitable driving position behind the wheel.

The XT, which Peugeot expects to be the volume seller, has 16-inch alloys and 55 profile tyres. This combination felt far better around the roads of Tasmania and absorbed most potholes with ease.

Equipment levels in the GT are on a par with its key rivals with a few surprises thrown in.

The GT has dual front, side and curtain airbags as standard, along with stability control and traction control, tyre pressure sensors, rear parking sonar, climate control air conditioning, multi-function display, six-speaker in-dash CD player, electric folding door mirrors, carbon fibre-look trim, panoramic glass sunroof, 60/40 split-fold rear seats, alloy pedals, automatic windscreen wipers and headlights and leather and cloth sports seats. Curiously, cruise control is a $250 option.

Interestingly, the GT, along with the luxury XE version, has static "directional" headlights. Unlike other more expensive active headlight systems, the GT’s headlights have a side bulb that lights up when angle sensors on the steering wheel registers an angle greater than 30 degrees.

It’s an impressive simple, and low-cost solution to the problem associated with night-time vision.

On paper the 207 GT appears to deliver the goods but so do a range of other warm and hot hatches, from the well-equipped Suzuki Swift Sport at one end of the price spectrum to the Mazda2 SP23 and Holden Astra SRi at the other.

Peugeot will be hoping its strong looks, superb engine and impressive all-round ability will woo buyers.